Gartmore suspends star trader Guillaume Rambourg

Guillaume Rambourg, star trader at Gartmore and one Britain's top money
managers, was suspended in a move that plunged the investment house into
chaos and wiped nearly £150m off the value of its shares.

Gartmore shares plunged after a star trader was suspended.

By Louise Armitstead and Richard Fletcher

10:48PM BST 30 Mar 2010

In a statement, Gartmore said Mr Rambourg, one half of Gartmore's award-winning duo alongside Roger Guy, had been suspended pending the outcome of an internal investigation into "directing trades".

The statement followedrevelations by Telegraph.co.ukof heavy selling of Gartmore's stock amid speculation that Gartmore's key managers were embroiled in an insider trading investigation.

Gartmore said the suspension of Mr Rambourg had followed conversations with the Financial Services Authority (FSA) but insisted the action was not linked to the co-ordinated arrest of seven City financiers for insider trading last week.

The statement said: "Gartmore is not connected with the recently reported joint investigation on insider dealing by the FSA and the Serious Organised Crime Agency."

Gartmore's shares continued to fall on Wednesday - they were down 10pc in early trading after tumbling 31pc on Tuesday and 10pc last week – amid fears that Mr Rambourg's suspension would trigger a rush of redemptions from concerned clients.

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On Tuesday the shares closed at 116p, down 53p. The shares were valued at 220p when the investment house floated on the London Stock Exchange just three months ago.

One of the biggest losers is Hellman & Friedman, the American buy-out firm, which owns 24pc of Gartmore. Henderson, the London-based manager owns nearly 20pc. Mr Rambourg has a stake of 3.85pc while Mr Guy owns 5.56pc.

Having joined Gartmore nearly 15 years ago, Mr Rambourg and Mr Guy are considered integral to the investment house. Together they manage more 20pc of Gartmore's £21bn investments and have been consistently responsible for generating as much as 40pc of the group's total revenues. Last month the pair won Eurohedge's European fund of the year, one of the industry's most prestigious awards, for generating 42pc returns for one of their AlphaGen hedge funds. The reliance of Gartmore on its star managers was raised as a point of concern when the fund manager listed at the end of last year.

Gartmore declined to give details on its internal investigation except to insist that it had not identified any information to date to suggest that clients have suffered any loss as a result of the breaches.

The term "directing trades" relates to ability of a fund manager to choose the broker through which to trade. Managers should choose the broker that offers the cheapest price for the stock although sometimes a broker who has offered help such as research will be chosen instead.

Gartmore's actively-traded hedge funds could generate tens of millions of dollars in commission, making them one of the top hedge fund clients in London for brokers.

Seven men were arrested last week as part of the FSA investigation into insider trading. The investigation is the largest ever by the UK market regulator. A number of leading City banks have been drawn into the investigation. All are co-operating with the authorities.